RDO Equipment Reports Fiscal 2000 Second QuarterResults.

FARGO, N.D.--(BUSINESS WIRE)--Aug. 19, 1999--

Revenues Continue Growth; Strong Results in Truck Operations

Offset Continued Weakness in Agriculture

RDO Equipment Co. (NYSE:RDO) announced today that revenues for the second quarter of the Company's 2000 fiscal year were

$177.2 million, a 16.3 percent increase over the $152.3 million reported for the same period in fiscal 1999. For the six month period ended July 31, 1999, total revenues were $357.8 million, an increase of 28.6 percent over the $278.3 million reported for the first half of fiscal 1999.

The significant year over year growth in revenues was due primarily to the acquisition of truck dealerships and the acquisition and expansion of material handling and equipment rental operations undertaken in fiscal 1999 and earlier this fiscal year.

For the second fiscal quarter, net income was $3.8 million, or $0.29 per share, compared to $4.5 million, or $0.34 per share for the same period one year ago. For the six months ended July 31, 1999, net income totaled $6.0 million, or $0.45 per share, compared to $7.0 million, or $0.53 per share for the first two quarters of fiscal 1999.

Ronald D. Offutt, Founder and Chairman of the Company's Board of Directors, stated, "The recent acquisitions in and expansion of our truck, material handling and financial services operations provide us solid platforms for continued growth, as demonstrated by our results this quarter and year-to-date. The growth in these markets have helped to offset the continuing weakness in the agricultural equipment market."

Offutt went on to add that the Company's recent announcement regarding the engagement of Deutsche Banc Alex. Brown to explore alternatives for its construction equipment rental operations was driven in part by opportunities to increase the Company's financial flexibility and to continue the growth of the Company's core business platforms.

Gross profit as a percentage of total revenues was 18.7 percent for the quarter, compared to 20.2 percent for the same period in fiscal 1999. For the first six months of fiscal 2000, gross profit as a percentage of revenues was 17.9 percent, compared to 19.6 percent for the same period one year ago. Gross profit is affected by the contribution of revenues by business segment and by the mix of revenues within each business segment. As truck revenues expand as a percentage of the total revenues, gross margins tend to decline as a percentage of sales. The Company also is continuing to experience margin tightening in construction equipment rental and agricultural equipment sales. Revenues from construction operations generally provide the Company with higher gross margins than do agriculture and truck operations. The Company's highest gross margins are derived from its parts and service, rental and financial service revenues.

Selling, general and administrative (SG&A) expenses as a percentage of total revenues were 13.0 percent for the second quarter of fiscal 2000, compared to 13.2 percent for the same period last fiscal year. For the six months ended July 31, 1999, SG&A expenses as a percentage of total revenues were 13.2 percent, compared to 13.4 percent for the first half of fiscal 1999. SG&A expenses are affected by the contribution of revenues by business segment and by the mix of revenues within each business segment. As a percentage of revenues, SG&A expenses generally are higher for construction and financial services operations than for agriculture, truck and rental operations and lower for equipment and truck sales than for parts and service and rental revenues.

RDO Equipment Co. is one of the leading and fastest growing companies engaged in the restructuring and consolidation of the equipment and truck retail industries in the United States. It operates 65 retail stores with operations in 11 states, specializing in the distribution, sale, service, rental and finance of equipment and trucks to the agricultural, construction, manufacturing, transportation and warehousing industries, as well as to public service entities, government agencies and utilities. Information about the Company, including recent news and product information, is available at its website - www.rdoequipment.com.

The future results of the Company, including results related to forward-looking information in this release, involve a number of risks and uncertainties. Important factors (such as customer confidence, weather, interest rates and global and local economic conditions) that will affect future results of the Company, including factors that could cause actual results to differ materially from those indicated by forward-looking statements, are discussed in the Company's Current Report on Form 8-K dated April 23, 1999, and other filings with the Securities and Exchange Commission. The Company makes no commitment to revise forward-looking statements, or to disclose subsequent facts, events or circumstances that may bear upon forward-looking statements.

Financial and operating highlights follow -0-

                         SELECTED FINANCIAL AND OPERATING DATA
                    (in thousands, except store and per share data)
                                      (unaudited)

                        Three Months Ended         Six Months Ended
                             July 31,                  July 31,
                        ------------------         ----------------
                        1999         1998          1999         1998
                        ----         ----          ----         ----
Revenue Data:
Total segmented
  revenues          $ 177,211    $ 152,337     $ 357,753   $ 278,282
 Construction          49.7 %       52.3 %        49.3 %      55.2 %
 Agricultural          18.0 %       26.9 %        20.2 %      30.7 %
 Truck                 25.5 %       16.1 %        23.9 %       9.7 %
 Rental                 5.6 %        3.9 %         5.5 %       3.6 %
 Financial services     1.2 %        0.8 %         1.1 %       0.8 %

Construction
  revenue mix       $  88,008    $  79,714     $ 176,445   $ 153,664
 Equipment sales      72.0  %      76.1  %       71.9  %      75.9 %
 Parts and service    26.9  %      23.8  %       27.1  %      24.0 %
 Rental                1.1  %       0.1  %        1.0  %       0.1 %

Agricultural
  revenue mix       $  31,943    $  41,033      $ 72,245    $ 85,413
 Equipment sales      66.8  %      66.6  %       71.0  %      71.0 %
 Parts and service    33.2  %      33.2  %       29.0  %      28.8 %
 Rental                ---  %       0.2  %        ---  %       0.2 %

Truck revenue mix   $  45,228    $  24,550      $ 85,489    $ 26,917
 Truck sales          82.0  %      77.7  %       81.5  %      76.3 %
 Parts and service    18.0  %      22.3  %       18.5  %      23.7 %

Rental revenue mix  $   9,963    $   5,886      $ 19,757    $ 10,123
 Equipment sales      20.2  %      10.4  %       23.6  %      10.3 %
 Parts and service     4.4  %       2.5  %        3.7  %       2.1 %
 Rental               75.4  %      87.1  %       72.7  %      87.6 %

Income Statement Data:
Revenues:
 Equipment and
  truck sales       $ 123,793    $ 107,709     $ 252,510   $ 198,810
 Parts and service     42,863       38,202        85,253      68,159
 Rental                 8,486        5,272        16,173       9,148
 Financial services     2,069        1,154         3,817       2,165
                      -------      -------       -------     -------
   Total revenues     177,211      152,337       357,753     278,282
Cost of revenues      144,016      121,543       293,827     223,755
                      -------      -------       -------     -------
Gross profit           33,195       30,794        63,926      54,527
Selling, general and
 administrative
 expenses              23,097       20,043        47,201      37,294
                      -------      -------       -------     -------
Operating income       10,098       10,751        16,725      17,233
Interest expense,
 net                   (3,621)      (3,042)       (6,720)     (5,427)
                      -------      -------       -------     -------
Income before income
 taxes and minority
 interest               6,477        7,709        10,005      11,806
Provision for
 income taxes           2,637        3,137         4,072       4,805
Minority interest         (2)           53           (39)         26
                      -------      -------       -------     -------
Net income          $   3,842    $   4,519      $  5,972    $  6,975
                      =======      =======       =======     =======
Net income
per share -
basic and diluted   $    0.29    $    0.34      $   0.45    $   0.53
                      =======      =======       =======     =======
Operating Data:
Comparable store
 revenues increase        0 %         (8)%           3 %         4 %
Stores open at
  beginning of period      66           54            64          50
 Stores opened              0            2             0           5
 Stores acquired            0            3             2           4
 Stores
  consolidated/closed      (1)          (1)           (1)         (1)
                      -------      -------       -------     -------
Stores open at
  end of period            65           58            65          58
                      -------      -------       -------     -------
Net purchases of
 rental equipment   $   1,891    $   7,948      $  2,807    $ 10,835
Net purchases of
 property and
 equipment                822        1,445         1,072       2,391
Depreciation and
 amortization           3,465        2,047         6,755       3,537


                                                As of July 31,
                                           -----------------------
                                              1999         1998
                                             ------       ------
Balance Sheet Data:
Working capital                            $  40,403    $  60,288
Inventories                                  227,499      258,287
Total assets                                 409,462      395,661
Interest-bearing floorplan payables          169,092      136,750
Noninterest-bearing floorplan payables        39,894       75,566
Total floor plan payables                    208,986      212,316
Total debt                                    59,847       46,691
Stockholders' equity                         108,710      108,045